Lowest summer attendance in U.S. movie theaters since 2005

In addition to the problems caused by the decline in DVD sales, you can now add bad news in movie theaters. According to Hollywood.com, U.S. theatrical attendance hit its lowest point since 2005, even though theatrical revenues hit a new record ($4.35 billion.) Why did revenues increase even though attendance dropped? The reason is that average ticket prices have been rising for years, and the introduction of 3D has pushed prices even higher.

If revenues are up even though the number of customers declined, that can't be bad news, can it? Actually, it can. Ticket prices can't continue to escalate at the rate they have indefinitely, especially given the slow and tenuous financial recovery. To spike revenues, movie studios are converting movies originally shot in 2D to 3D, with generally poor results. Revenues for these converted titles have been dropping throughout the year, and if the studios aren't careful, they may kill off the willingness of moviegoers to pay more for 3D before the new format even has a chance to take hold.

If theaters can't raise prices and attendance continues to decline, the inevitable outcome will be decreased theatrical revenues. DVD sales and revenues are also declining, even though the "loss leader" discounting of new DVD titles by the big-box retailers (Wal-Mart, Target and Best Buy) is largely a thing of the past. Blu-Ray hasn't taken up the slack in DVD sales and is unlikely to do so in the future. The market is shifting to DVD rentals, video on demand and digital downloads, but these channels bring in much less revenue than DVD sales.

It's the combination of all these trends, not any one trend in particular, that is (or should be) grounds for extreme concern in the movie industry. Some say that the industry has always had down years and has always rebounded--first radio, then television threatened to kill off movies but failed--but studios have become addicted to the "crack" of DVD sales and increased ticket prices. Movies like "Avatar" and the "Transformers" series couldn't have been produced without these revenues. Studios will have no choice but to either maintain budgets and release fewer films (increasing their exposure to risk of failure) or decrease budgets and produce the same number of films. This will decrease the potential for breakout blockbuster hits, which could result in even lower revenues. Neither outcome is appealing, and there's no solution on the horizon.

New Canon XF100 and XF105 Camcorders: High quality, low price?

In preparation for both IBC and Canon Expo, Canon has announced two new professional camcorders: The XF100 and XF105. The two new models are positioned as "little brothers" to the XF300 and XF305 released earlier this year, but their performance is very similar. The new camcorders both support the same XF MPEG-2 4:2:2 50Mbps codec as the XF300 and XF305. In addition, they're designed to be used in pairs for 3D video capture, and have infrared low-light capabilities that Canon claims allow them to capture scenes in total darkness. Both models record to Compact Flash media and support hot-swapping.

As with the XF300 and XF305, the primary difference in the two models is connectivity: The XF105 supports genlock in, SMPTE timecode in/out, and both HDMI and HD-SDI out, while the XF100 only supports HDMI out. Canon hasn't released any prices, but the company's press release says that it will "...demonstrate the versatile low-cost capabilities" at Canon Expo later this week, which suggests that they'll be priced significantly less than the XF300 and XF305. Both models are scheduled to ship in Q1 2011.

My suspicion is that the XF305 will be priced close to Sony's HXR-NX5U AVCHD-based camcorder, which has a list price in the U.S. of $4,950 and a street price of just under $4,000. The XF codec should provide considerably better video quality and easier editing than the H.264/AVC-based AVCHD codec used in the Sony model.

Can we PLEASE have a manual video mode? (UPDATE: Sony listened...)

Update, 7 September 2010: According to EOSHD.com, Ichiro Takagi, Deputy President of Sony's Imaging Business Group, announced that Sony will be adding manual video controls to some of its NEX- and Alpha-series DSLRs (most likely the NEX-5 and Alpha A55, although Takagi-san didn't mention specific models.) The new firmware is to be formally announced at Photokina at the end of the month, so unless Sony announces yet more new models between now and then, the firmware will upgrade existing models. (Now, if Nikon will only get on board...)

Nikon and Sony have recently announced two important DSLRs: The D3100 from Nikon and the A55 from Sony. Both cameras have 1080P (at least under some conditions), both have continuous autofocus in video mode, and both are priced very aggressively (especially the D3100). However, both are missing something every important: Manual controls in video mode.They do video in full auto only.

Both cameras support both manual and full auto operation in photo mode, so all the capabilities for supporting manual video are built in. Everything, that is, except for manual support in the cameras' firmware. Why did Nikon and Sony choose not to implement manual video mode? One argument is that given the target audience for these cameras, first-time DSLR owners moving up from point-and-shoots, manual video would be too difficult to use and too intimidating. However, shooting good pictures in manual still mode isn't easy, yet both cameras can do it.

In my opinion, the reason reason why Nikon and Sony have left out manual mode is that they don't want to cannibalize other, more-expensive products. Nikon is likely to have a higher-end DSLR with manual video mode coming very soon for $1,000 or more (U.S.), and to date, Sony's position on full manual is that if you want that, you'll have to buy one of their camcorders. Only Canon has gotten it right, with 1080P and full manual control in the T2i/550. Canon, which sells at least as many DSLRs as Nikon and quite a few more than Sony, trusts its customers to be able to flip the necessary switch to enable or disable manual control.
Manufacturers have the right to put whatever features they want into their DSLRs. However, if a customer wants manual video control, they're not going to accept full auto, and if they can't find manual in a camera in one product line at a price they can afford, they'll buy a camera from someone else.

In praise of smart women

This is a little off-topic for me, but it's something I've been thinking about for a while. I was very lucky to grow up around smart women. My mother and father ran their own retail store for 30 years, and in the 1960s, my mother was the first woman in the eastern part of the U.S. to learn how to do jewelry repair. It was a time when the skill was considered far too difficult for a woman. She learned how to do soldering with a torch, how to resize rings, and other things that required both talent and strength. She was a feminist years before feminism was a movement. If she wanted to do something, she learned how to do it.

With that in mind, given that I follow media and technology in my blog, I'd like to talk about three women that deserve, and undoubtedly will get, a lot more attention throughout their careers:

• Kari Byron is an artist and one of the host's of Discovery's "MythBusters." She's an equal partner with the (four, count 'em, four) male co-hosts. She's just as involved with constructing the equipment needed to test myths as anyone, and she's treated as an equal. This gives a subtle but important lesson to girls and women watching the show--you can do whatever you want and be an equal to men, even in areas that have historically been considered the province of men. Now she's hosting a daily show on Discovery's Science Channel called "Head Rush" that's intended to get middle-school students, and especially girls, interested in science and technology.
  
  "Head Rush" isn't "Watch Mr. Wizard" (yet,) but if it's successful, a generation of scientists and engineers may one day see her as the reason they got interested in science.
• Felicia Day is an actress, writer, producer, musician and businessperson. When she came to Southern California to enter the entertainment industry, she got frustrated with the lack of roles, stereotyping and lack of control that women (and men) have to contend with, so she wrote her own business plan. She create a web series called "The Guild" that over a few years has gone from being funded by viewer contributions to a self-sustaining series funded by Microsoft that's available through many outlets and generates revenues from episode and merchandise sales.
  
  She had many offers to sell the rights to "The Guild" but chose to keep control of the series. Ms. Day has established herself as a successful actress in series like "Buffy the Vampire Slayer" and the web musical "Dr. Horrible's Sing-Along Blog," but she doesn't need to rely on others for opportunities--she's in control of her own destiny.
• Allison Scagliotti is an actress and musician who co-stars on SyFy's "Warehouse 13." She has the poise and communication skills of someone who's been doing it professionally for 20 years, yet she'll just turn 20 in September. G4's Chris Hardwick interviewed her on his "The Nerdist" podcast, and was blown away when he found out that she was just 19. She's getting an opportunity to hone her acting craft with some very good actors, but my suspicion is that acting is ultimately only going to be one of the things that she does, and that (like Sarah Polley) she'll end up spending a great deal of time behind the camera as a director and writer.

We're still not at the point where women have the same opportunities in science, technology and media as do men, but we're beginning to get there, and these three smart women are helping to make a difference.

We're buying lots of eBooks, but are we reading them?

I just read a very funny blog entry about television procedurals written by Josh Friedman (and no, we're not related--I'm Feldman and he's Friedman, and further, no two Feldmans, not even mother and child, are related to each other, but I digress.) In his posting, he writes the following about the television show "Lost":

I'm not the first to say this, but Lost is a freak show that will never be repeated. It's the Michael Jackson of television. No one should try to deconstruct the Lost phenomenon ever again. There is nothing to be gained from studying Lost's success. It's a Black Swan, or an Outlier, or one of many other books on my Kindle I'll never read now because, let's be honest, it's on my Kindle.

He's picked up on a behavior that I've noticed in myself. I've bought five eBooks from Amazon to read in the Kindle app on my iPad, and I haven't read a single one of them. With a physical book, it's visibly sitting somewhere, and every time I see it, I'm reminded that I haven't read it yet, or I haven't finished it. If I'm done with it, I've stored it on my bookshelf. Unless I bother to open up my Kindle app, there are absolutely no reminders that I've got the books. "Out of sight, out of mind." I call it Kindle Amnesia Syndrome, or KAS.

There are copious statistics on how many more eBooks than print books that Kindle owners purchase after they buy a Kindle, but I wonder how many of those eBooks actually get read, and how long that purchasing pattern will continue. My suspicion is that after a few months, a Kindle owner's eBook purchases will go down to about the same rate as print.

September will be a big month for new product announcements

Stand by for a lot of new product announcements in September:

• The announcements start Wednesday, September 1st, with Apple's fall event in San Francisco. We're likely to see a new iPod touch and iPod nano; we may also see the long-rumored next-generation Apple TV, and possibly even an announcement date for iOS 4 for the iPad. 
• IFA, one of the world's largest consumer electronics conferences, begins on Friday, September 3rd in Berlin. Samsung has already previewed its new Android-based Galaxy Tab tablet, and will formally introduce it at the conference, and we're likely to hear from many other companies as well.
• IBC, the International Broadcasting Conference, begins on Thursday, September 9th in Amsterdam. We'll see production versions of products that were shown as pre-production models at NAB last April, as well as many new products. Panasonic will almost certainly show production models of its AG-AF100 4/3" and AG-3DA1 3D camcorders, and Sony is likely to formally announce its professional Alpha-lens-based camcorder.
• Photokina, the biannual photography conference, will begin in Cologne on Tuesday, September 21st. Canon, Nikon and Sony have already announced new DSLRs in advance of Photokina, but many more products are likely to be announced at the show.

eBooks and on-demand--the new publishing economy?

The Wall Street Journal ran an article today about on-demand publishing. Like eBooks, on-demand has been the "next big thing" for many years, but it looks like it's finally finding a viable niche. On Demand Books, which makes the Espresso Book Machine, has sold 51 machines in 50 locations. They supply a $97,500 computer and automated binding and trimming machine that interfaces with a variety of printers.

The Espresso can be used to make available out-of-print and low-demand titles that would otherwise be unavailable. The cost of the Espresso, which is designed to be installed in bookstores, has been a big impediment to its success. It's been extremely difficult for bookstores to justify the cost of the Espresso based on the demand for low-volume titles. However, it's found a niche in college bookstores, where the prices of the books and other materials are much higher than in conventional bookstores, and it's possible to justify a $100K+ investment.

The rapid rise of eBooks may open up an unintended opportunity for devices like the Espresso. As demand for eBooks increases, print runs will get smaller, since publishers won't want to be stuck with large numbers of unsold copies of books. The fixed costs per print run won't change, so the delivered cost of the books produced per run will increase, which will drive even more buyers to eBooks. However, there will be some demand for printed versions of books for decades, so the ability to economically produce individual printed books as needed will be critical.

Publishers and even distributors will inevitably replace their existing printing and binding systems with "just-in-time" systems that can produce a few copies of a title as needed. Retail chains like Barnes & Noble and Borders could be reduced to little more than kiosks offering instant download of eBook titles and same-day delivery of on-demand print versions.

These new on-demand books may not be any more expensive than today's print books, since there will be no need to allow for returns. By and large, nothing will get printed that isn't already sold to a customer. The days of remainder tables, "stripping" (removing and returning the covers of unsold paperbacks for credit) and pulping books will be a thing of the past. We're still years from the "tipping point" where decreased print book volume makes on-demand printing more economical than large print runs, but the crossover is inevitable. Paradoxically, it will be eBooks that drive the market for on-demand printing.

That sound you hear is TiVo circling the drain

Residents of Alviso, California have reported hearing a strange "swishing" sound for several weeks. That sound has now been identified as TiVo circling the drain. TiVo's fiscal second-quarter financial results were released yesterday, and the company is continuing its long downward spiral:

• The company lost 125,000 subscribers in the quarter, and its total subscriber base stands at 2.5 million vs. 3.1 million last year, down 22%.
• Subscriber churn in the quarter was 1.9%, up from 1.5% a year ago.
• Revenues fell 11% overall to $51.6 million, and the services and technology component of revenues fell 14.2% to $42.1 million.
• The company posted an overall loss of $15.3 million, compared to $2.7 million a year ago.
• TiVo has been claiming for several years that licensing deals with cable and satellite operators would make up the difference, but companies like Comcast have been extremely slow to roll out services based on TiVo's technology.

If TiVo's problems were simply due to the bad economy, you could argue that a turnaround is only a matter of time. However, TiVo's subscriber declines predate the recession, so a macroeconomic turnaround may well not help TiVo enough to make a difference. Companies that fade as long as TiVo has very rarely turn around on their own.

In my opinion, it's time for TiVo to actively begin looking for an acquirer. The company still has some valuable patented technology, but as time goes on, more companies are figuring out ways to get around those patents, so TiVo management needs to move while it still has something to sell. TiVo could be integrated into the businesses of set-top box powerhouses such as Motorola, Cisco and Pace. Its DVR and advertising monitoring technologies could be valuable to Google in the future development of Google TV.

TiVo is forecasting still more losses for the next quarter, and investors have to wonder when, if ever, they're going to see an upside. Given the company's track record, the only likely upside will be when the company is acquired.

Radio Shack to operate mobile centers within Target stores

Earlier today, Target announced that it will partner with Radio Shack to open Target Mobile centers within 850 of Target's stores in the U.S. by the end of this year and virtually all Target stores by the end of next year. This is a direct move to counter the increased emphasis on mobile at Best Buy and Wal-Mart. In particular, it looks very similar to Best Buy's partnership with Carphone Warehouse, the U.K.'s largest independent mobile phone retailer. In order to increase its mobile retailing expertise, Best Buy acquired 50% of Carphone Warehouse in 2008, and the two companies together developed the Best Buy Mobile centers that are now located in all Best Buy stores, as well as 77 free-standing Best Buy Mobile stores.

Radio Shack has been rumored to be in play for acquisition, but it seems very unlikely that Target would partner so closely with a company that might be purchased by a competitor. Therefore, it's likely that Target is in the running to acquire part or all of Radio Shack. If the in-store Target Mobile centers are successful, this could lead to some Radio Shack stores being rebranded as Target Mobile stores.

Sony introduces its first DSLRs with 1080p/i video

Sony has just introduced four new cameras, two DSLRs (A560 and A580), and two quasi-DSLRs (A33 and A55). Their video specifications are very similar; all four cameras can do 1920 x 1080 1080i at 50/60fps with AVCHD compression (at 17Mbps average), and 1440 x 1080 1080p using MPEG-4 compression (at 12 Mbps average). So what, you ask, is a quasi-DSLR? Sony's new design uses a permanent, highly light-transmissive fixed mirror than enables continuous autofocus and live mode for both still shots and video. This means that the cameras have electronic, not optical, viewfinders, although they have a largely conventional DSLR body and can use Sony's conventional Alpha-range lenses. The A560 and A580 are conventional DSLRs and can't do continuous video autofocusing.

Digital Photography Review has published a review of the first production version of the A55. There are some unusual "features" that it found in its video tests:

• The camera can record approximately 29 minutes of video in AVCHD mode, but it can only record 9 minutes if SteadyShot is turned on. The review is unclear as to why image stabilization affects storage capacity so much, but it may be due to the fact that the camera does digital image stabilization inside the camera rather than using lenses with optical image stabilization.
• Even though MP4 uses a lower bitrate and should allow a storage card to save more video, storage of MP4 files is limited to 2GB at a time, which limits the maximum duration of a shot to around three minutes. AVCHD doesn't have this limitation and can span multiple files in a single shot.
• DP Review found that the A55's autofocus feature was often less than helpful in video mode, as the camera sometimes lost track of the object that it was focusing on and went out of focus. This problem was especially pronounced with fast-moving sports events.
• They found that the A55 has a fairly pronounced rolling shutter "jello" problem, about the same as many other DSLRs, but more severe than some competitors.
• The review states that the A55's average AVCHD bitrate is 17Mbps, but it's unclear if that's the camera's maximum bitrate. Some other DSLRs and camcorders can support 24 to 30 Mbps.

DP Review was very impressed with the A55 as a still camera, and in fact gave it a Gold Award, so it's important to recognize that it's a very good camera. However, as with many DSLRs, the video functionality of the A55 isn't as well implemented as the still image features. In the U.S., the A55 will ship in October at a list price of $750 (body only) and $850 (with an 18-55mm lens). The A33, which has essentially the same video specifications as the A55, will ship in September priced $100 lower than the A55.

In Cable TV, one quarter does not a trend make

Today, SNL Kagan reported that in the second quarter of this year, net pay TV subscriptions in the U.S. dropped for the first time in history. Cable systems lost 711,000 subscribers, and six of the eight largest cable operators reported their worst subscriber losses ever. So that means that consumers are dropping pay TV and moving to over-the-top Internet video services, right?

Not necessarily. Satellite (DirecTV and Dish) and IPTV services (Verizon FiOS and AT&T U-Verse) gained a total of 495,000 subscribers in the same quarter (414,000 for IPTV, 81,000 for satellite), and the satellite services don't even offer high-speed Internet. Why the big gain? You've probably seen the aggressive introductory price deals offered by the satellite and IPTV companies on television or in the mail, so people are switching to these services to save money.

Really? According to Steve Hawley, an IPTV industry analyst I used to work with, the monthly ARPU (Average Revenue per User, or subscriber) for the IPTV services is higher than that of any of the major cable operators. Only Cablevision comes close to Verizon and AT&T. That means that on average, the IPTV operators are charging more per month than the cable operators.

But pay television still lost a net of 216,000 subscribers in the quarter, so that still means that those subscribers went to Internet video, right? Perhaps, but Verizon and AT&T lost 515,000 subscribers to their DSL high-speed Internet services in the quarter, and you need high-speed Internet for Internet video.

So what does it all mean? We simply don't know yet. Over the next year or so, we can start sorting out what's really going on and identify the underlying causes. Are we seeing a temporary drop due to economic pressures (people losing or in fear of losing their jobs) that will be reversed when the economy improves? Are people experimenting with Internet video or committing to it as a replacement for pay TV? Is there a long-term shift from cable to IPTV and satellite, or in a saturated market, are people simply switching back and forth to get the best deal, just like they used to do with long distance services?

The key thing to remember is that one quarter does not a trend make.

Are we at the end of the blockbuster film era?

NewTeeVee is reporting on a research report written by BTIG analyst Richard Greenfield, which states that the delays between the DVD release of feature films and their availability on cable VOD have collapsed from an average of 30 days in 2006 to five days in the first half of 2010. Now, most movies are being made available on VOD on the same day and date as DVD.

According to the article, Greenfield's belief is that movie studios have largely given up on protecting DVD revenues against VOD in favor of protecting the entire home video revenue stream against Netflix and Redbox. The typical price for a day-and-date VOD movie is $4.99 in SD and $5.99 in HD, and 70% of that revenue goes to the studio (versus 60% for conventional "windowed" VOD releases.) By comparison, Netflix's model is that they essentially pay the manufacturing cost for the DVD when they purchase it (often no more than a dollar or two (U.S.)) and then pay the studios a small amount every time a subscriber rents the title. Redbox purchases the DVDs at wholesale, and that's the only revenue the studios get; there's no revenue sharing beyond the initial purchase.

The problem is that the studios are making a lot less from VOD than from DVD sales, even though they don't have any manufacturing and shipping costs with VOD. Consider a DVD with a list price of $19.95; studios typically receive 50% of that, or $9.98. Manufacturing costs for most DVDs in the quantities that studios purchase them are $1 or less, so that leaves almost $9.00 for the studios for shipping and warehousing, advertising, royalties, etc.

Compare that with the $4.99 that cable operators charge for SD VOD films. Studios get 70% of that, or $3.50, and they have no manufacturing, shipping, or warehousing costs, but let's assume that shipping and warehousing adds $0.50 to their costs. That means that they get $3.50 from the VOD showing and $8.50 from the DVD sale. The $3.50 that they do get is much more than they get from Netflix or Redbox, but it's still $5.00 less than they get from DVDs.

The implications of this shift are much bigger than simply making less money per transaction. For more than ten years, DVD sales have been the profit engine driving the movie studios. Theatrical attendance has been dropping for years, and the only reason that the studios have been able to maintain their theatrical revenue stream has been increased ticket prices. The profits from sales of DVDs have enabled studios to dramatically increase their production and advertising budgets for feature films. These profits enabled studios to go ahead with films that cost $200 million or more to produce; their expectation was that with break-even performance in theaters, they could make a big profit from DVD sales.

Now, the DVD profit well is drying up, and Blu-Ray, which was once seen as the successor to DVD, isn't making up the difference and will likely never generate the level of revenues that DVDs once did. This explains the desperate push on the part of studios to adopt 3D. Theaters charge more for 3D tickets, and studios get as much as 80% of the ticket price for releases in their first few weeks in theaters. In addition, Blu-Ray supports 3D, and studios hope to push more Blu-Ray sales through 3D. However, the studios are at risk of killing 3D by flooding the market with cheesy post-production 2D-to-3D conversions.

Without the DVD profit engine, and without anything to replace it in the near term, studios are going to have to cut back on spending. That might mean betting more on blockbusters and their huge budgets, and cutting back the total number of movies they release each year, or maintaining the same number of releases and cutting back on budgets. Either approach means big changes for the movie industry.

Lather, rinse, repeat...the right model for webcasting?

Continuing with my webcasting theme for this weekend, there are many different ways to do webcasting (and, for that matter, video on the web in general.) One approach is the talk show, done over and over with different hosts and different subject matter. One of the first people who pursued this model successfully is Leo Laporte. Laporte, a TechTV alumnus, started a podcast called "This Week in Technology", or TWiT. Eventually, he produced additional podcasts, and then started webcasting them. At first, he did occasional video versions, but he subsequently turned his Petaluma, CA ("Home of the World Wrist Wrestling Championship") farm into a video production center where he produces around 15 webcasts, most on a weekly basis. His TWiT Webcast Network is funded by advertising and contributions; Laporte pays his own salary from the contributions (he also hosts radio and television shows for commercial broadcasters and cable networks), and uses the advertising revenue to pay for everything else.

Following TWiT came Revision3, founded by Kevin Rose, Jay Adelson and David Prager in 2005. Rose, another TechTV alumnus, cofounded the digg website with Adelson, and on the side, Rose and Alex Albrecht (yet another TechTV refugee) started a podcast and webcast about digg called Diggnation. The success of that show led Rose, Adelson and David Prager (he worked at TechTV as well) to found Revision3. The company has close to 20 shows, most of which are produced weekly in Revision3's studios in San Francisco. Like TWiT, Revision3 is funded by advertising, and it also sells branded merchandise.

The latest entry into this field is "This Week In...", owned and run by Jason Calacanis. If "This Week In..." sounds familiar, it should. Calacanis, a frequent guest on TWiT Network shows, purchased the "thisweekin.com" domain name and set up a very similar webcasting network to TWiT, which caused confusion on the part of the audience and a good deal of animosity between Laporte and Calacanis. This Week In produces 19 webcasts, the most popular of which is "Kevin Pollock's Chat Show," a weekly talk show hosted by actor and comedian Kevin Pollock. This Week In is advertising-funded.

All three networks have a number of things in common:

• While all three networks have shows with female hosts and shows targeting women, most of their shows are male- and technology-focused (which makes sense, given that the founders of two of the three networks came from TechTV, a strongly male- and technology-focused cable network.)
• Their production values are very much on the basic side: TWiT's shows are shot in Laporte's combination studio/control room, and This Week In's shows look like they're all shot on Charlie Rose's set when Rose isn't around. Revision3 uses a TV news set metaphor, and goes for a little more color and outside-the-studio production than the other two.
• The shows tend to be overly long, meandering and often light on content. Webcasts have no schedule and no time limits, but schedules and time limits force producers to tighten shows and get to the point. It's asking a lot to expect viewers to watch these shows for more than an hour (or even more than two hours, as a "Kevin Pollock's Chat Show" with Seth MacFarlane ran earlier this year.)

The business model behind these networks is quantity over quality: TWiT, Revision3 and This Week In know that most of their shows will get small audiences at best. They plan on a few of their shows getting large audiences (at least for webcasting), and that the appeal of those shows will allow them to sell advertising across their entire schedule of webcasts, generating more revenues, even at a lower CPM. With a large schedule of webcasts, they also hope to have the option of selling out to a bigger media company, as Calacanis did when he sold Weblogs, Inc, a service that published Engadget, Autoblog and several other blogs, to AOL.

I question whether this is really a viable long-term strategy. It's similar to the 24-hour cable news networks, whose audiences pale in comparison with those of entertainment-oriented cable networks, even though they have distribution into tens of millions of U.S. homes. They have to put something on the air 24 hours a day, but very few people are watching most of the time.

I'd like to see someone do fewer but better, more tightly produced shows that are a better use of the audience's time. Could a webcasting network build a viable business with just a few good, well-produced shows? Would really compelling shows increase audiences and eliminate the need for a bunch of "filler" shows? It seems like a reasonable alternative.

A new model for video acquisition and live production

Earlier this week I attended an event at Morningstar's headquarters in downtown Chicago. To get there, I walked past the studios of WBBM-TV, CBS' owned-and-operated station in Chicago. Like many of the new television studios built in major cities in recent years, WBBM's news studio is surrounded by windows and visible to the street from two sides, so that pedestrians can watch the shows as they're produced.

I was passing by in mid-afternoon, so there was no production going on, but I could take a look at the equipment. There were three high-end studio cameras on robotic pedestals (only one person is needed to operate all three cameras) plus a smaller camera on a fixed pedestal looking out the window for street shots. I looked up the list price for a typical high-end studio camera from Sony that's like the ones used at WBBM, and it costs $100,000 (U.S.).

By comparison, Panasonic can equip a HD webcasting studio with three automated cameras, a camera control unit and switcher for $23,000. One person can simultaneously switch the show and operate the cameras. Add in everything else you need--tripods with heads and dollies, a computer for graphics, an audio mixer, wireless microphones, LED lights, a live streaming encoder and software--and you'll be around $40-45,000. under $50,000 (I priced it out, and a complete system is priced around $47.000.) So for about half the cost of a single high-end studio camera, you can have a fully-functional live HD production facility (that, incidentally, is small and light enough to fit in the back of a minivan.)

WBBM, of course, is an over-the-air broadcaster that's also carried on cable, satellite and IPTV systems all over the greater Chicago area, so even though its news programs are struggling in the ratings, it gets a huge audience in comparison with what most people could attract through webcasting. However, the webcasting operation can run at a tiny fraction of WBBM's budget, so:

• It doesn't need to generate a lot of revenues to be profitable, and
• Once it reaches profitability, it will have a much higher operating margin than the broadcaster

A couple of years ago, I visited Current TV's headquarters in San Francisco and saw how they were using computers and data-based video workflows to build an automated cable network at a fraction of the cost of legacy networks. Just as Current changed the model for how to build a cable network, these new systems from Panasonic and other vendors are changing the model for video acquisition and live production.

Nikon's D3100 takes on the Canon Rebel T2i

Nikon has introduced the D3100, a replacement for the D3000 and a direct competitor for Canon's Rebel T2i. Most importantly for readers of this blog, the D3100 is the first Nikon DSLR that can do full 1080P video, albeit only at 24fps (faster frame rates require 720P.) It's also got continuous autofocus in video mode, which only the Panasonic GH1 and G2 have been able to do.

Update, August 25, 2010: The first expert feedback is coming in, and according to EOSHD.com, Nikon Germany has stated that the D3100 has no manual controls in video mode. While this makes it easier for first-time users and is useful for some applications, it makes the video mode almost useless for more serious production work.

In Zacuto's DSLR shootout, Nikon's D3S had the best low-light performance but took a backseat in most of the other tests due to being limited to 720P. The Nikon D3000 has nowhere near the extended ISO exposure range of the D3S, but it's an indicator that a professional-level 1080P DSLR is coming from Nikon.

One of the most impressive features of the D3100 is its price: With an 18-55mm zoom lens, its list price in the U.S. is $699.95, almost exactly $200 less than the T2i with a comparable 18-55mm lens. For those photographers who already own Nikons and have an investment in Nikon lenses, the D3100 means that they can move into video without losing their investment.

Before you go rush out and buy a D3100, you should wait until experts such as Philip Bloom and Nino Leitner and blogs like Digital Photography Review have a chance to test it. Resolution is just one of the many factors affecting video quality and performance, and we don't yet know what compromises Nikon made in order to get to the D3100's low price. Nevertheless, the D3100 is proof that Nikon is taking video seriously and intends to keep up with Canon.

Redrock Micro introduces lower-cost DSLR rigs

Not long ago, I wrote a post comparing the price of Sony's new NEX-VG10 interchangeable lens camcorder with the cost of purchasing a NEX-5 DSLR and adding components to make it handle like a camcorder. When I did that comparison, I looked at prices from Zacuto, Redrock Micro and others. I was surprised to find that despite Zacuto's reputation for higher prices, they were actually less expensive than Redrock Micro for entry-level rigs.

Redrock has now launched a new line of low-cost DSLR rigs that are more in line with the prices of new DSLRs, especially models like Canon's Rebel T2i. The new Nano Rigs are priced from just over $100 to just over $600 (U.S.), and the highest-priced Nano is less expensive than the lowest-priced models in Redrock's DSLR 2.0 line of rigs. Other companies are likely to follow Redrock Micro with their own "prosumer-priced" lines of DSLR accessories, which will keep pricing pressure on the camcorder manufacturers.

Is Google's Chrome Web Store a precursor to Chrome tablets?

The rumors are flying that Google plans to release a Chrome OS-based tablet built by HTC in partnership with Verizon, and put it on sale on Black Friday (the day after Thanksgiving and the heaviest shopping day in the U.S.) Google is also preparing the Chrome Web Store--no rumor, since it was announced at the I/O Conference earlier this year. Details on the Store are now up on Google's web site; here are a few highlights:

• Developers will be able to create and offer installable web apps based on HTML5 and Ajax, themes that change the look of the Chrome browser/OS, and Chrome browser extensions that change or add to the functionality of Chrome itself.
• Apps can be given away or sold. The minimum price for sold apps is $1.99 (vs $0.99 in the iPhone app store), and Google will charge a processing fee of 5% of the sale price plus $0.30 per transaction (vs. Apple's 30% of the sale price.) For a $1.99 sale price, the developer would retain $1.59 from Google and $1.39 from Apple.
• The Chrome Web Store also supports one-time payments as well as monthly or yearly subscriptions, free trial options, and what they call "custom payment solutions".

Google is clearly working to have a good population of apps, themes and extensions ready for this Fall, which is when the first Chrome OS tablet is rumored to be hitting the market. This may also explain in part why Google has refused to allow any tablet vendors to license Google's Android applications or access the Android Marketplace. If Google is positioning Android for phones and Chrome OS for tablets, it would be in its interest to discourage usage of Android for tablets. On the other hand, we hear of new Android tablets under development almost every day, and that Gingerbread, the next major release of Android, will have explicit support of tablets. So who knows, and more to the point, what are consumers to think if tablets running on two completely different Google operating systems come out at about the same time?

Panasonic sets new low price point for webcasting studios

Panasonic has introduced a trio of products that represent a new low price point for automated webcasting studios:

• The AW-HE50S is a 1/3" 1080P camera with integrated pan/tilt/zoom and a HD/SD-SDI interface, at a $5,500.00 list price. (The same camera is available as the AW-HE50H for $1,000 less with a HDMI interface.)
• The AW-HS50N is a small 1080P 5-input, 3-output HD switcher with four HD/SD-SDI and one DVI-D input, and 2 HD/SD-SDI and one DVI-D outputs, an AUX bus, built-in keyer, dissolve transitions and a multiviewer, allowing all inputs and transitions to be viewed on one HDTV monitor. The list price is $4,000.
• The AW-RP50 (list price $2,200) is a remote camera controller that allows a single operator to set up all the parameters and control the movement of up to 100 HE50 and HE100 cameras. It has a network connection for the AW-HS50N, so that a single operator can simultaneously switch a show and control the cameras.

With these three products, you can create a basic, automated three-camera setup for less than $23,000, or a four-camera setup for just over $28,000. What's more, all of the components are light: The switcher and camera controller together are around nine pounds, and each camera is 3.5 pounds. Add a live encoder with an Ethernet or WiFi interface, and you're ready to stream.

The problem with eTextbook pricing

Let's start with a fact of the college textbook business: Textbook publishers hate used books. They see every sale of a used book as revenue that they should have received, but didn't, thanks to the First Use Doctrine that allows books to be resold by their purchasers. Consider the following case: A college bookstore sells a new textbook title for $100, then buys it back for $50 at the end of the semester for resale as a used book. For the next semester, it sells it for $50 as used. Assuming that the book can be used for ten semesters before it's too beaten up and marked up to resell, and the bookstore buys it back for $20 each time, the bookstore will end up grossing $320 (even if they buy it back the last time and pulp it.) The publisher, on the other hand, will get only some fraction of the original $100.

That's why publishers are increasingly interested in eTextbooks. Unlike print books, eTextbooks can't be resold, and in some cases, they have "time-bomb" DRM schemes that make them totally unusable after 120 to 180 days. Publishers get revenue from every sale. The problem, however, is that publishers are pricing eTextbooks too high to stop used book sales.

Kenneth Green wrote about the problem on his DigitalTweed blog. He compared the price for one textbook, Mankiw's Principles of Microeconomics, from a variety of sellers, in a variety of forms. He compared purchasing the textbook new, used, used with saleback, and as an eTextbook, along with rental. (One title does not a comprehensive analysis make, but it's a fair place to start.) According to Green, he found that title's list price is $172, and that's what most college bookstores will sell it for. However, Amazon priced it at $153. Keep those two numbers in mind, because everything else works off of them.

Green found that Amazon sells the used print version for $83.49. Amazon's Kindle price for the eTextbook is $110.38, and they're underpriced by both CourseSmart and Follett, who sell their eTextbook versions for $86.49 and $87.84 respectively. He could rent the title for the semester from Chegg for $50.49, or from Textbooks.com for $49.49. And here's the kicker: Amazon will buy back the print version for $67.25, no matter where it was purchased originally.

So, here's the breakdown:

• New list price: $172.00
• Best discounted new price: $153.00 (Amazon)
• Best used price: $83.49 (Amazon)
• Best eTextbook price: $86.49 (CourseSmart)
• Best rental price: $49.49 (Textbooks.com)
• Best used price with buyback: $16.24 (Amazon)

The used with buyback option is by far the best choice, but it's not going to be available for all books, and even if it is for a specific title, it may not be as lucrative as Amazon makes it for this title. Considering the other choices, your best option would be rental, followed by buying the title used, followed by buying the eTextbook.

In short, at their current prices, eTextbooks simply don't make sense unless they offer so much value that they overcome their price disadvantage. With today's eBook readers, they don't offer any significant advantages, especially for cash-starved students. If publishers really want to kill the used (and rental) book market, they have to price eTextbooks at about the same as rental, or about a third the best discounted new price.

That scares publishers, because they believe that doing so will devalue their titles and prematurely kill print sales. However, they'd end up with more money in their pockets over time. Let's consider my first example, with a $100 print title sold new once and used nine times. If publishers get 60% of the sale price for that new sale, they'd get $60 dollars in total. However, if they sell 10 copies of the eTextbook version for $30 each and get the same 60%, they'll end up with $180, or three times as much.

Pricing eTextbooks at or below print rental prices will dramatically increase eTextbook sales and hasten the end of used textbook sales and rentals. eTextbooks are also much more convenient for students, and low prices will save them money. In the long run, pricing eTextbooks very aggressively will be a win-win for everyone.

The set-top box Tower of Babel

A company called Dyyno is offering to create your own channel for the Roku set-top box, or you can run your video content on their existing channel. If you want your own channel, they'll charge a one-time fee of $7,500, plus a monthly usage fee starting at $149 for 1,000 viewer hours. If you're willing to run your content through their channel, you'll pay only the monthly usage fee.

Roku has its own developer program, which costs nothing to join, and its own SDK. If you've worked with JavaScript, you can probably figure out how to create your own channel without paying $7,500 and being locked into a single online video service. However, once you've developed your Roku channel, it won't work on Boxee, Popbox, TiVo, Google TV, or any of the myriad Internet-connected Blu-Ray players and HDTV receivers. Each one of those platforms has its own SDKs, and each one requires a separate development effort.

That's why I developed the Capstan Content Syndication (CCS) format. CCS is a free, open source, XML-based format that does for live, scheduled and on-demand video content what RSS does for fixed content. It also provides the hooks necessary for authentication, monetization, search and recommendations. If the set-top box companies support CCS, content providers will be able to use the same feed and format for a variety of different devices and platforms. It will dramatically decrease the cost of making video content available, and will get many more channels onto many more devices.

I'll be presenting a session on CCS at the Open Video Conference, to be held at the Fashion Institute of Technology in New York City on October 1st and 2nd of this year. There's more information on CCS at the Klemfarb website, and you can download the spec and participate in the definition process at the project's Google Code site.

More, much more, on the Hurd case

Bloomberg is reporting what I and a lot of other people said the day that the HP/Mark Hurd scandal erupted: The stories from all the parties involved the day that Hurd was dismissed and shortly after didn't make sense. There was supposed to be a mediation session between Hurd, his personal counsel, Jodie Fisher, her counsel and HP's external counsel investigating the case, Covington & Burling, scheduled for the Friday that Hurd was eventually dismissed. At the mediation session, HP's counsel was to see the actual evidence that Fisher had and would have had an opportunity to ask her questions. Instead, without the Board's knowledge, Hurd privately settled the case with Fisher on Thursday and canceled the mediation session.

It's important to note that sources speaking for Hurd claim that the Board encouraged him to settle the complaint before the mediation session. Nevertheless, the fact that HP's investigators never had a chance to either review the evidence or interview Fisher brings up a very important question: How could the Board rule that no sexual harassment took place if they never saw the evidence or interviewed Fisher? (The Wall Street Journal reports that the Board couldn't get the evidence it needed to determine whether or not sexual harassment took place, so they announced that no harassment occurred. Why didn't they say that they were denied the opportunity to get the evidence they needed to make a determination?)

Bloomberg reports that Fisher flew to company events via first-class air, stayed in luxury hotels, and had dinner with Hurd 15 to 20 times. Each dinner cost around $400. Hurd reported that he was having dinner with his security guard, but the guard denied it. Fisher was paid between $1,000 and $5,000 for every event she hosted (so she made somewhere between $15,000 and $100,000, assuming that she had dinner with Hurd after every event.) Her duties were to stand around at a cocktail party for 90 minutes, direct traffic around Hurd, and then have dinner with Hurd after the event. A few more questions: Couldn't HP simply have sent an internal corporate communications manager with Hurd to each event to direct traffic? In how many cities does dinner for two cost $400?

Now for the most salacious part of the new disclosures: HP's investigators found evidence on Hurd's work computer that he had viewed Fisher's R-rated, adult-themed movies. Another Hurd source said that all he had done was search for her on Google and found her videos, but in the context of everything else that happened, that's highly unlikely.

If HP's board had just come clean with the real reasons for and details behind its decision when Hurd was terminated, this "drip-drip-drip" of embarrassing and salacious disclosures never would have happened. As I said in my first posting, there's yet more s--t likely to hit the fan in this case.

Who don't you trust? Newspapers and TV news, that's who

U.S. newspapers, along with local and national television news shows, have all seen their audiences decline for more than a decade. The decline in newspapers has been blamed primarily on the growth of the Internet and the availability of news on the web for free that was once only available for purchase in print. The decline of television news has been blamed largely on its aging audience. There's another reason for the declines, however, and it has nothing to do with the Internet or audience age.

The Gallop Organization released a poll last Friday that shows that confidence in newspapers and television news is nearly at an all-time low for newspapers, and is equal to the all-time low for television news. In the most recent poll, only 25% of respondents said that they have "a great deal" or "quite a lot" of confidence in newspapers, and only 22% have the same level of confidence in television news. The numbers have been flat since 2007. By comparison, in 1993, the first year that the survey covered both newspapers and television news, 31% of respondents had "a great deal" or "quite a lot" of confidence in newspapers (that number was as high as 39% in 1990), and 46% had the same level of confidence in television news (the number has been generally going down ever since.)

You might think that 18-to-29-year-old respondents, who would likely be the most Internet savvy, would be the least interested in newspapers, but you'd be wrong. That age group trusts newspapers more than any other demographic category, with 49% saying that they have "a great deal" or "quite a lot" of confidence in newspapers, while their confidence in television news is only 22%. The political beliefs of the respondents also have an impact: People who consider themselves Republicans or Conservatives have the least confidence in both newspapers and television news. Democrats and Liberals have the most confidence in newspapers; when it comes to television news, Democrats also have the most confidence, but Liberals are slightly behind Moderates in their confidence. Independents are much closer to Republicans in their confidence in newspapers, while Moderates and Liberals are somewhat closer in their confidence in both newspapers and television news.

That's a lot of statistics, but here's the bottom line: If you don't trust a news source, you're very unlikely to pay for it. If three-quarters of the public has little or no confidence in newspapers, why would anyone expect them to pay for them when they can get the same content online for free? If almost 80% of the public has little or no confidence in television news, is it any wonder that they watch "The Daily Show", replay recordings from their DVRs or get on the web rather than watch the news on TV?

How are newspapers and television stations dealing with this problem? They're dumbing down their product even further. Rupert Murdoch has announced that News Corporation plans to launch a dumbed-down national newspaper specifically for tablets like the iPad. Tribune is experimenting with a dumbed-down television news format in Houston (as if television news hasn't already been dumbed down to insipid levels). If the big problem is lack of confidence, making the news even less credible isn't going to increase confidence, readership, or viewership.

In short, newspapers, television stations and networks can't blame their problems solely on extrinsic factors. The quality, accuracy and relevance of their reporting have at least as much to do with their present predicament as do the Internet and aging audiences.

Busting the DAM (Distribution/Attention/Monetization) Problem

No matter what kind of media you're producing, if you're looking for a financial return, you have to accomplish three things:

1. Distribution: You have to get your book, music, movie or video to the people who are likely to be interested in it.
2. Attention: You have to let your audience know that your media is available and get them interested in reading, listening to or watching it.
3. Monetization: You've got to figure out a way to get your audience to pay for your efforts.

That's the DAM problem, and you have to solve it in that order. You can't monetize media that your audience doesn't know about and can't find. You can get your audience excited, but if there's no way for them to get your work, you've wasted your effort.

It used to be that as a creator, all you really needed to do was solve the distribution problem. If you could get a record company to sign your band, a publisher to publish your book, a movie studio to distribute your movie or a television or cable network to distribute your video, you were golden. The distributor would take responsibility for getting your work into stores, theaters or networks, promoting your work, and getting paid for it. (Actually collecting money from the distributors has been, and remains, an ongoing issue.) However, getting a company to distribute your work could take years of effort, and you might never get past the distribution stage.

Today, distribution is the easiest part of the problem to solve. If you're an author, you can easily self-publish your books in print or electronically, through companies like Amazon and Lulu. If you're a musician, you can distribute on CD or electronically through Amazon, CD Baby and many other companies. If you've produced a movie, Amazon will distribute it on DVDs or electronically, as will Netflix and many others. And if you've created a video, from a two-minute short to a two-hour epic, you have many distribution choices, including YouTube, Vimeo, Livestream, Ustream, Kyte, etc. In most of these cases, it costs little or nothing to get your work into distribution; you pay a portion of your revenues when it's sold.

The real price for doing your own distribution is that there's no big company to handle the attention and monetization parts. You've got to figure that out yourself, and do it without the big budgets that the "old media" companies have for advertising and promotion. Movie studios spend hundreds of millions of dollars promoting blockbusters like "MacGruber" (and see how well that went?) You'll have to get out the word using social media, local events, and whatever guerilla marketing tactics you can use to get attention without spending much money.

The monetization part of the problem is also going to be your responsibility. If you're working with Amazon, for example, it'll process and fulfill orders for you, but you may be limited in where and how you can sell your work outside Amazon's network. Apple is also an option for electronic distribution and monetization, but only for its population of devices and software. Netflix doesn't fund production and does limited revenue sharing based on the number of copies of your movie or video that its subscribers view; it may bring in some money, but not much.

Your distribution and monetization options for video depend a great deal on what you're doing. If you're producing a series, and you're very talented (and somewhat lucky,) you can do what Felicia Day and Kim Evey did and get Microsoft to underwrite production and distribution of "The Guild," what Mark Gantt did and get Sony's Crackle to do the same for "The Bannon Way", or what Illeana Douglas did in getting Ikea to sponsor "Easy to Assemble." (Please note that these are extremely unlikely outcomes.) You can also produce a video for a site like Funny or Die, in order to get exposure. In this case, your video is a stepping stone to other opportunities. (This is also fairly unlikely, unless you're Zack Galifianakis.)

I realize that I haven't solved the attention or monetization problems at all, which is why it took me three attempts to write this blog entry. My point (and I had one, at least when I started writing) is that distribution is now the easiest problem to solve. Standing out from the crowd. and especially, making money from your efforts, are the real problems.

Oracle vs. Google: A very big deal indeed

Bloomberg Television this morning is covering the reaction to the Google/Verizon "policy statement", which effectively means nothing except that Google likes its business relationship with Verizon and wants to keep it. Yesterday's lawsuit filed against Google by Oracle, on the other hand, potentially means a great deal, up to and including wrecking Google's Android strategy, Google TV, and the business plans of Motorola, HTC, Sony, Adobe and many other companies.

Oracle has charged Google's Android with deliberately violating seven of its Java-related patents that it got when it acquired Sun Microsystems, plus unspecified copyright violations. Oracle is asking for a permanent injunction against Android, the destruction of all devices that use Android, and unspecified financial damages. I'm not an attorney, and I'm definitely not a patent attorney, so I'm in no position to determine the validity of Oracle's charges. However, two posts this morning, from James Gosling, the father of Java, and Miguel de Icaza, suggest that Google and its licensees may very well have something serious to worry about.

Sun got $1.6 Billion (US) from Microsoft for infringing its Java patents, but that's likely to be less than the lowest price that Oracle is going to get from Google. Unless Google can somehow invalidate all seven patents plus get past the copyright infringement charges, a process that could take years, the fate of Android and every product dependent on Android is going to be up in the air until Google settles. Oracle may also go after individual Android licensees, but I think that's unlikely.

However, one result of the case may be that Google will have to charge for commercial Android licenses. The price will probably only be a fraction of what Microsoft will charge for Windows Mobile 7, but it will take Android out of the "free for all" category. It will change the financial equation for handset, tablet and set-top box manufacturers--not enough to push them off of Android, but enough to decrease profit margins or increase prices.

Even if Google completely redesigns Android not to use any Java intellectual property, it will still have to pay Oracle for past infringement, and the resulting "new" Android is highly unlikely to be backward-compatible with old versions and old apps.

Blackmagic Design acquires Echolab

Last May 27th, I wrote a blog entry about the demise of Echolab, a well-respected manufacturer of video production switchers that had just run out of money and gone into liquidation. At that time, I wrote that Blackmagic Design might be a good buyer of Echolab's assets. For years, Blackmagic has driven down the prices of professional video capture cards, converters and routers. Last year, they acquired DaVinci, and this year, they flipped the professional color correction market on its head by offering a software-only DaVinci implementation for OS X for under $1,000 (US), and a full-bore, Linux-based implementation with dedicated control surface for literally hundreds of thousands of dollars less than the previous comparable DaVinci Resolve implementation.

By merging Blackmagic's and Echolab's know-how, the company could introduce powerful production switchers at lower prices than the competition. Today, Blackmagic announced that it acquired Echolab, and said that it will be displaying an updated version of Echolab's Atem switcher at IBC in Amsterdam next month. The entry-level Atem with one mix/effects bus and 10 inputs (8 SD/HD/3Gbs SDI and 2 HDMI) will be priced at $19,995 (US), and the two mix/effects bus model with 18 inputs (15 SD/HD/3Gbps SDI and 3 HDMI) will be priced at $51,995.

In the future, it's easy to imagine Echolab's technology brought down to the desktop level--perhaps a reengineered UltraStudio Pro or Multibridge with 1 M/E bus and 4 inputs for under $10,000. An iPad-based user interface wouldn't be out of the question, either.

In any event, this is great news for both Blackmagic Design and the engineers who worked on the Echolab platform, many of whom have been rehired by Blackmagic. Here's the official press release:

Blackmagic Design Acquires EchoLab

Boston, MA, USA - August 12, 2010 - Blackmagic Design today announced the acquisition of all assets of EchoLab Inc., one of the world’s leading designers and manufacturers of production switchers. EchoLab has over 35 years of experience in designing and building production switchers since 1974. This experience has culminated in the latest ATEM range of production switchers that include cutting edge technology for world leading features such as up conversion on inputs, multilayer SuperSource™ input, Stinger™ transitions, and built in multi-view monitoring, all in a familiar and affordable, fully digital M/E style design.

The ATEM production switchers will be demonstrated at the Blackmagic Design IBC 2010 booth #7.B25.

For the thousands of people who use production switchers, ATEM will be instantly familiar. It uses the conventional M/E style of design that’s easy, safe and fast to use on even the most critical live production. ATEM also combines powerful features such as SuperSource™, which is a separate multi layer engine with 4 x 2D picture in picture DVE’s and 4 x keyers that provide the same power as adding a whole extra multiple M/E switcher to the ATEM input!

SuperSource can be called at any time, and connects into the switcher as an input. Only SuperSource gives you the power of 4 built in layers of keying, plus 4 picture in picture DVE’s, while keeping ATEM an easy and fast to use conventional M/E style switcher.

For connecting to the widest range of cameras, decks and computers, the ATEM 1 M/E model includes 8 SDI inputs that operate at SD, HD and 3 Gb/s SDI, plus 2 switchable HDMI/Analog video inputs. ATEM includes multiple SDI outputs for program, preview, and aux. outputs, plus an HDMI output for the multi-view monitoring output. The ATEM 2 M/E model includes 15 x SD, HD and 3 Gb/s SDI inputs, as well as 3 x switchable HDMI/analog inputs for a total of 18 video inputs. ATEM 2 M/E also includes two multi-viewer outputs, clean feed, aux., program and preview SDI outputs. All ATEM switchers include serial ports for camera and VDCP servers as well as genlock.

ATEM switchers allow previewing of transitions before putting them on air. Users simply select “Preview Transition”, and the preview output of the switcher will show all the elements of the transition, so users can have the confidence to make fast multi layering decisions during live production.

When working with multiple cameras and sources, ATEM saves thousands of dollars on expensive monitoring because it includes a built in multi-viewer that lets you see multiple sources on a standard HDMI television or monitor as well as program and preview outputs. When sources are on-air, ATEM multi-viewer displays highlighted borders, and multi-viewer windows can be custom labeled.

ATEM also includes Stinger transitions for exciting and creative transitions. Stingers can be loaded into the switcher, and are then available on the 2 built in media players. ATEM can hold 32 stills and hundreds of frames of real time clips with alpha channels, so users have a wide range of graphics and clips to play back as animations, supers and stingers. Media players can be selected into any of the 4 built in upstream keyers or the transition block for ultimate flexibility and creativity.

For enhanced effects and transitions, ATEM includes a 2D DVE with borders and drop shadows that can be used with any upstream keyer or in the transition block. This means the built in DVE can be used for transitions, or it can be used for keying operations. Because the 4 built in upstream keyers are stacked, users have a wide range of layering options available, and completely independent of the SuperSource input.

When the 4 upstream keyers are combined with 5 SuperSource layers, the transition block keyer, the 2 down stream keyers and the stinger, even a 1 M/E ATEM switcher can have up to 13 keyers on screen simultaneously. This is the heart of the power of ATEM, and would require 3 M/E’s on other brand switchers.
This makes ATEM a tremendous value for money, while providing a compact and portable solution.

ATEM can be fully automated with macros, and also includes support for VDCP controlled servers and robotic cameras, all from the ATEM control panel. Customers can use the built in joy stick for controlling cameras, and then recall macros for incredibly powerful operation with very few people. No other switcher allows customers to produce powerful live productions with so few people!

“I have been using live production switchers since I was in school where we covered local theater, sports, racing and bands. I think it’s the most exciting way to do production because it’s all live and thousands of people are watching what you are doing! Production switchers need to be powerful while also being familiar and easy to operate. I think the ATEM switchers from EchoLab are the most exciting switchers I have ever seen, and it’s incredibly exciting to add these products and intellectual property to the Blackmagic Design family”, said Grant Petty, CEO of Blackmagic Design. “The ATEM switcher is a fantastic creative tool, and it includes powerful features not found in any other product. Since the acquisition, we have already dramatically expanded the engineering team working on ATEM. This fresh engineering team, which is a combination of new as well as experienced EchoLab staff, will allow us to move faster in adding new features to the ATEM product. It’s so exciting, I cannot sleep!”

ATEM Key Features
•    1 M/E model supports 10 video inputs, 2 M/E model supports 18 video inputs.
•    SD, HD and 3 Gb/s SDI, HDM and analog video inputs.
•    Full 10 bit HD operation for broadcast quality.
•    Built in multi-viewer for monitoring switcher sources, includes custom labeling and tally borders.
•    Built in SuperSource allows 4 picture in picture DVE’s and 4 keyers independent of the M/E.
•    2 Media Players are built in for animated graphics and stingers.
•    Stinger effects are independent of keyers.
•    Includes 4 upstream keyers with each including chroma, luma, linear and pattern keying built in.
•    Includes 2 downstream keyers, and independent fade to black.
•    Supports macros, and graphic and clip downloads via PC software.
•   Up to 13 keyers active at one time.

Availability and Price
ATEM is currently being retooled for production and will be available late 2010 for US$19,995 for the 10 input 1 M/E model, and US$51,995 for the 18 input 2 M/E model from Blackmagic Design resellers worldwide.

Press Photography
Product photos of the ATEM production switchers can be obtained by emailing Terry Frechette at terryf@blackmagic-design.com. Press images will also be posted to www.blackmagic-design.com/press/images/ <http://www.blackmagic-design.com/press/images/> early next week.

About Blackmagic Design
Blackmagic Design creates the world’s highest quality video editing products, color correctors, video converters, routers, waveform monitors, live production switchers and film restoration software for the feature film, post-production and television broadcast industries. Blackmagic Design’s DeckLink capture cards launched a revolution in the television industry, while the company’s DaVinci Emmy™ award winning color correction products have dominated the television and film industry since 1984 and continue ground breaking innovations including stereoscopic 3D and 4K workflows. Founded by world leading post production editors and engineers, Blackmagic Design has offices in the USA, UK, Japan, Singapore, and Australia. For more information, please check www.blackmagic-design.com <http://www.blackmagic-design.com> .